Everyone knows someone who works in construction. It’s one of those unwritten facts of life. If policymakers in Washington have their way, you’ll soon be able to say you used to know someone who worked in construction. That’s because the current cap and trade plan, proposed in the U.S. House of Representatives by Henry Waxman (D-CA) and Ed Markey (D-MA), will dramatically raise the cost of using energy. And construction is, well, energy intensive. Even without cap and trade, The Energy Information Agency projects industrial sector growth in construction will fall because of rising energy prices and increased international competition.
Waxman-Markey will make it worse. When you want people to use less of something, you tax it. Of course, Waxman-Markey is trying to achieve this goal in the most inefficient way possible. The legislation has become so convoluted that it has become lobbyists gone wild, fighting for your tax dollars. It’s highly susceptible to fraud, and because most of the allowance handouts have been given away, it’s almost certain there will be no reduction in CO2, which has the environmental activists up in arms. (Of course, the reduction in carbon from Waxman-Markey wouldn’t make a difference, anyway.)
The goal of cap and trade is for people to use less energy, and the only way policymakers can make that happen is if they tax energy high enough for people to reduce consumption. But as energy prices rise, producers will raise their prices out of necessity. However, because consumers will be constrained by their budgets, the consumption of energy-intensive products and services will decline. Construction is a perfect example. Facing their own budget constraints, companies will build less and unemployment in the construction industry will dramatically increase. The Heritage Foundation’s Center for Data Analysis modeled what would happen under Waxman-Markey and the news is grim for the construction industry. The legislation would increase unemployment in the industry for every year modeled, 2012-2035. By 2012, 280,000 jobs will be gone in the construction industry; the figure breaches 500,000 by 2025. There will be over 1 million fewer jobs in the construction industry as a result of cap and trade beginning in 2031.
Where will all those shovel-ready jobs be if Waxman-Markey passes?